Gulf Arab states unfazed by oil price slump

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Oil prices fell sharply last week, shedding more than $10 a barrel as the dollar struck 14-month highs against the euro
© AFP Karim Jaafar

DOHA (AFP) – Arab oil producers in the Gulf appeared unfazed on Sunday about a week-long slump in crude prices, insisting at an energy conference that there was no need for an extraordinary OPEC meeting.

“I am never worried,” Ali al-Naimi, oil minister of OPEC kingpin Saudi Arabia, told reporters when asked if he was concerned about the sharp dip in oil prices last week.

“OPEC is not standing still. OPEC is always in movement,” he told reporters on the sidelines of the Arab Energy Conference which began on Sunday in the Qatari capital.

Qatari Energy Minister Abdullah al-Attiyah said there was no proposal to hold an extraordinary meeting of the oil cartel, blaming psychological factors for the price fall.

“There is no proposal to hold an extraordinary OPEC meeting,” he told reporters.

His statement followed a call on Saturday by his Kuwaiti counterpart for OPEC to meet ahead of its scheduled conference in October if oil prices slide below 65 dollars barrel.

Oil prices fell sharply last week, shedding more than 10 dollars a barrel as the dollar struck 14-month highs against the euro on worries about the impact of Greece’s debt crisis on the eurozone.

Mohammad bin Dhaen al-Hamli, energy minister of the United Arab Emirates, said he believes OPEC is unlikely to meet ahead of schedule despite the falling oil prices.

“Our next conference is in October,” Hamli said on Saturday when asked if OPEC should meet now to consider actions to stop the price slide.

“What has been taking place is a correction… prices are going up and down,” he told reporters, adding that oil prices were being driven by market forces.

On Friday, New York’s main contract, light sweet crude for June delivery shed 2.00 dollars to 75.11 dollars a barrel. Brent North Sea crude for June delivery slid 1.56 dollars to 78.27 dollars a barrel.

Crude prices had soared above 85 dollars a barrel late last month on more confident signals about the global economic recovery which is expected to stimulate demand.

“This is normal,” said Attiyah when asked about the drop in prices.

“Price fluctuations have nothing to do with supply and demand… The Greek and European (debt) crisis, and the pressure on the euro, have led to a psychological reaction from the market,” he said.

“Whatever you do now, the market will not respond, because it is under huge psychological pressure,” he said, adding that “we should wait calmly to see what will happen in the market when this psychological situation settles.”

The slump in crude prices came as OPEC’s production hit a 16-month high in April, with the OPEC-11 members obliged by the quota system overproducing by around two million barrels per day.

Production of the OPEC-11 (excluding Iraq) hit 26.8 million bpd in April according to Middle East Economic Survey, with all the OPEC members exceeding their quotas.

The ninth meeting of the Arab Energy Conference ends on Wednesday.

The conference was established in 1979 by the Organisation of Arab Petroleum Exporting Countries, or OAPEC, and the Arab Fund for Economic and Social Development.